Bangladesh

Company Formation in Bangladesh

Bangladesh is ideally located to cater to the fast growing market with a large population in Asia. YourGlobalPro can assist in Bangladesh for Company Formation, Secretarial Compliance, Tax Registration, VAT Reclaim, Document Retrieval, Trademark Registration and Citizenship Services.

People’s Republic of Bangladesh (Bangladesh) is in South Asia. It is bordered by India and Myanmar and is considered as the 8th most populous country in the world. The country’s biodiversity includes a vast array of plant and wildlife, including critically endangered Bengal tigers. The below content will explain you in detail about the requirements for the company formation in Bangladesh, know more about the process of trademark registration in Bangladesh and understand the Bangladesh Legal Compliance requirements.

Doing Business Introduction

Bangladesh has a steady annual economic growth averaging 6. The improvement in the country’s economy is its textile exports which composes 80% of the country’s total exports. The principal financial centers of the country are Dhaka and Chittagong, where the Dhaka Stock Exchange and the Chittagong Stock Exchange is located. As per Doing business report of The World Bank –Bangladesh ranks 176 for 2017 survey in terms of ease in doing business.

The Bangladesh economy is growing steadily, with the government taking various measures and initiatives to sustain this growth. Low labour costs, abundant natural resources, economies of scale, cost-effective products and a large population are just some of the advantages the country offers over other Asian markets. Bangladesh can also be a gateway to the larger markets of South Asia. The government has eased the procedure for company formation in Bangladesh, giving investors a wide range of business ideas to choose from in an economy where a small capital is not a limiting factor.

List of Businesses Available in Bangladesh

Bangladesh offers you a wide range of business opportunities in the 32 thrust sectors identified by the government. These have the potential to attract considerable foreign investments as well as increase export earnings for the country. These key sectors include infrastructure, agriculture, energy & power generation, light engineering, ICT, pharmaceuticals, apparel, handicrafts, ceramics, frozen food, tourism, and healthcare amongst others.
The government has set up a number of SEZs, industrial parks and hi-tech parks. Special incentives and tax benefits have also been chalked out for these key sectors.

How to start a Business in Bangladesh

If you are going in for business in Bangladesh, there are various types of business entities to choose from. Each has a different procedure for incorporation and regulation.

A Bangladeshi citizen can choose to set up:

Sole Proprietorship – the business and the owner are one entity.

Partnership – with 2 to 20 partners with a formal agreement, where the partners are liable for the partnership.

Company – a limited liability company where the liability is limited only to the amount of share capital. It can be a private limited company with less than 50 shareholders or a public limited company where the shares are offered to the general public.

Foreign investors need to take a slightly different route by setting up:

Subsidiary company – most preferred by foreign businesses. The parent company is a shareholder in this limited liability company set up in Bangladesh.

Branch office – an extension of the parent company, which covers its liabilities.

Company Registration Procedure in Bangladesh

The Registrar of Joint Stock Companies And Firms (RJSC) needs certain information for company registration in Bangladesh. Here are the steps involved in this procedure:

Company Name Clearance - a name approval or clearance is a must before the company can be set up. Memorandum of Association and Articles of Association – need to be formulated as per RJSC guidelines that the object clause in the MoA should have less than 400 words and 7 clauses.

Directors – at least two local or foreign directors. They should be over 18 years of age and of sound financial status.

Shareholders – a minimum of 2 and a maximum of 50 shareholders in a private limited company. Shares can be transferred or new ones issued anytime after company registration in Bangladesh.

Registered address – a physical local address of the company is mandatory. A P.O. Box cannot be used.

Submit all necessary documents –Paying the registration fees will complete the company registration application. Once the RJSC is satisfied with all the documents, they will issue the:

• Certificate of Incorporation with the company name, registration number and date of incorporation
• Form XII with the list of directors of the company
• Copies of MoA and AoA duly certified

Once the company is registered, share certificates are issued to the shareholders. A company seal and a rubber stamp for the company have to be created. A Register for shares, shareholders and directors also needs to be maintained.

Foreign Company Registration Procedure in Bangladesh

Subsidiary companies offer great flexibility for businesses in Bangladesh – these can be public or private limited companies. 100% foreign ownership is possible in most sectors, as is a joint venture with foreign or local partners. Some sectors may require prior approval from government agencies.

For the most part, incorporation for subsidiary companies is similar to other private limited companies. There are, however, a few additional points to keep in mind:

Bank account for the Authorized and Paid-up Capital – must be opened before the registration application.

The subsidiary company is treated as a domestic company for tax purposes.

All the shareholders and directors can be foreigners.

A work permit for foreigners is required only if they relocate to Bangladesh to operate the company.

The Bangladesh government is encouraging new businesses to be incorporated in the country, and has made company formation in Bangladesh a fairly quick and smooth process.

Before starting the business, the first decisions to make is to determine what form of business entity to establish. There are several types of entities that can be incorporated in Bangladesh are as mentioned below:

Limited Liability Company (LLC)

Public Limited Company (PLC)

Branch Offices

Representative Office

Time Frame for Incorporation of Company in Bangladesh varies from depending on the type of entity selected and each business type has its own advantages and disadvantages. YourGlobalPro professionals estimate the time required for the process of Company formation in Bangladesh to be completed is 17-20 working days.

Benefits of Registration of a Company

Below are the advantages of company formation in Bangladesh:

Tax rebates, subsidies, tax holidays and other incentives are provided by the government to manufacturing and export oriented businesses.

Tax exemptions are enjoyed by entrepreneurs in Bangladesh

Foreign entities can easily repatriate their profits from resident companies in Bangladesh to their home country

Companies resident in Bangladesh are subject to income tax on their worldwide income while non-resident companies are taxed only on income derived from a permanent establishment in Bangladesh. Below are some crucial points in relation to taxation rates in Bangladesh.

Trademark registration in Bangladesh is performed through the Department of Patents, Designs, and Trademarks (DPDT). Any person claiming to be the proprietor of a trademark already in use or proposed to be used in Bangladesh may apply in writing for registration of a Trademark in the prescribed manner. An applicant should file an application for the registration of a trademark to the Trademark Registry Wing of the DPDT.

The Trademark Registration in Bangladesh is valid 7 years from the date of filing trademark and is renewable for similar periods of 10 years. It takes approximately 6-8 months from first filing to registration

YourGlobalPro professionals are fully equipped to assist you with the process of trademark registration in Bangladesh for your business. For assistance or advice in the matter of the trademark registration in Bangladesh or intellectual property – please feel free to write or contact us.

Below are some of the important points in relation to Company Secretarial Compliance in Bangladesh:

Companies must obtain VAT registration and Tax Identification Number

Companies must also register with the Registrar of Joint Stock Companies and Firms

The number of Board meetings held during the year and attendance by each should be included in the shareholder’s report.

The CFO and the Company Secretary of the companies shall attend the meetings of the Board of Directors, provided that the CFO and/or the Company Secretary shall not attend such part of a meeting of the Board of Directors which involves consideration of an agenda item relating to their personal matters

The Institute of Chartered Accountants of Bangladesh follows accounting standards based on Bangladesh Financial Reporting Standards. Financial statements must be filed annually for public and private companies.

YourGlobalPro professionals can assist you with the entire bookkeeping and accounting services for your Bangladesh Business Setup as per your business needs including implementation of financial accounting software, accounting records preparation and time to time preparation of budgets, forecasts.

Auditing service

LLCs, PLCs, Branch offices and Representative offices are required to have an assigned auditor. LLCs and PLCs are required to submit audited financials to the authority.

YourGlobalPro professionals provide auditing services as required by your business in Bangladesh.

Banking

Opening an account in a bank is quite easy in Bangladesh. The documentation requirement differs from Bank to Bank and needs to comply for the Bank account opening.

The major banks in Bangladesh are HSBC, Sonali Bank, Islami Bank Bangladesh Limited, Dutch Bangla Bank Limited, State Bank of India and Habib Bank Limited. All banks are stable, reliable and offer the same level of services.

YourGlobalPro professionals facilitate all the paper work in relation to banking need and can assist you in an opening bank account for your business plan in Bangladesh.

In Bangladesh, the responsibility of legal compliance is not a one-time affair, but a continuous process. Below is the various Bangladesh legal and compliance requirement to be followed by incorporated entities:

LLCs in Bangladesh require at least 2 shareholders and 2 directors, who can be an individual or legal entity of any nationality.

LLCs are required to provide audited annual financials to the Bangladesh Income Tax Authority (BITA)

PLCs are required to have at least 7 shareholders and 3 directors, who can be an individual or legal entity.

PLCs can trade public securities.

PLCs must have their books audited on an annual basis.

Branch offices must register with the Board of Investment (BOI) and the BITA.

Branch offices are required to have their books audited.

Representative offices are required to register with the BOI, Bangladesh Bank and Registrar of Joint Stock Companies and Firms

YourGlobalPro professionals can assist you in Bangladesh Legal and compliance requirements.

HR and Employment Law and Immigration / VISA

Below are some of the important points in relation to HR & employment law in Bangladesh: